Brandon Gutman: How is the criteria used to evaluate marketing success changing?
Yuchun Lee: The research shows that the measures used to determine marketing success have changed dramatically. Specifically, nearly two-thirds of CMOs think that return on marketing investment (ROI) will be the primary measure of the marketing function’s effectiveness by 2015. This represents a big shift, as traditionally most CMOs have not been expected to provide hard financial evidence of their ROI. However, due to the current economic volatility and pressure to be profitable, organizations can no longer afford to write a blank check for their marketing initiatives. This increasing emphasis on ROI also reflects the scrutiny the marketing function is currently attracting, itself a reflection of the function’s growing prominence. In fact, today’s CMOs are in much the same position as CFOs were a decade ago, when their role evolved from guardian of the purse strings to strategic business adviser. As a result, CMOs will need to begin quantifying the value they bring to the business, be it from investing in advertising, new technologies or any other activity. What’s interesting is that while the importance of ROI is growing, our research found that even among the most successful enterprises, only 44 percent feel fully prepared to be held accountable for marketing ROI.
While CMOs are becoming more influential, are there areas where this influence still needs to grow?
It makes sense that if CMOs are going to be held responsible for the marketing returns they deliver, they must also have significant influence over all “Four Ps” which include promotion, products, place and price. What’s interesting is that the study found this is often not the case. Specifically CMOs say they exert a strong influence over promotional activities such as advertising, external communications and social media initiatives but play a smaller role in shaping the other three Ps. In fact, less than half of the CMOs surveyed have much sway over key parts of the pricing process, and less than half have much impact on new product development or channel selection. As we move forward, businesses must make a concerted effort to give CMOs the needed influence over each of these key areas if they are to help their business succeed.
Are CMO’s effectively monitoring how their brand is being perceived by their customers?
As we all know, consumers are more plugged then ever into social media channels which is giving them more control and influence over brands. With the balance of power shifting from organizations to their customers, CMO will need to react by embracing new marketing approaches, tools and skills, The challenge is that they are not responding to this new playfield accordingly. In fact, while four out of five CMOs expect that they will have to make fundamental changes to traditional methods of brand and product marketing, 80 percent or more are still focusing primarily on traditional sources of information such as market research and competitive benchmarking and 68 percent rely on sales campaign analysis to make strategic decisions. When it comes to social media channels, our team found that only 26 percent of CMOs are tracking blogs, 42 percent are tracking third party reviews and 48 percent are tracking consumer reviews to help shape their marketing strategies. As the amount of unstructured data continues to skyrocket, the successful CMOs will be those who are able to plug into this new source of insight to increase revenues, reinvent their customer relationships and build new brand value
As we look forward, what steps must today’s CMO take to ensure their success?
To meet the challenges they face today, it is imperative that CMOs boost their own digital, technological and financial proficiency. The issue we see right now is that many appear to be surprisingly reticent to do just that. For example, when asked which attributes they will need to be personally successful over the next three to five years, only 28 percent said technological competence, 25 percent said social media expertise and 16 percent said financial acumen. In order to meet success, CMOs must embrace technology and make it a key part of their skill set.
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